TVNZ to splash cash on local content
TVNZ boss Kevin Kenrick says the company is set to spend big on content in the second half of this year.
“Our investment in local content will be the strongest . . . in a decade,” Kenrick told the Weekend Herald.
“We really feel that now is the time to make that shift more towards local content being our primary point of difference.”
This comes off the back of the broadcaster’s strong result yesterday, which showed a net profit of $33.9 million for the six months to December 31, up $18.2m or 115 per cent on the same prior period.
Total revenue for TVNZ was down 1.9 per cent, or $3.3m, to $175.7m after its advertising revenue fell from $170m to $163.8m because of lower demand off the back of Covid-19.
But its operational expenses also dropped largely because of lower spending on content as a result of Covid-19 supply chain impacts.
Its expenses were down 21.5 per cent, or $32.8m, to $119.9m — with $24.2m of the decrease attributed to lower content spending.
TVNZ also cut $8.6m in costs across the business.
“Lockdown restrictions have had an impact on productions both locally, but even more significantly internationally,” Kenrick said.
The bet on local content offers TVNZ at least some certainty as the world remains in the grips of the pandemic.
“It just so happens that the production environment in New Zealand is more favourable than in many other countries,” Kenrick said.
This will come as welcome news to local production companies, but TVNZ may also face some competition for production staff, given the number of major international shows currently being produced here.
“There are capacity constraints in terms of the supply of content in countries like New Zealand, where we’re able to produce quite freely, whereas elsewhere in the world there’s deferment and delays in terms of production.”
Earnings before interest, tax, depreciation, amortisation and fair value adjustments were $47m, up from $15.8m.
Kenrick said TVNZ had adopted a three-phased approach to the impacts of Covid-19 on the business to refocus, recover and reimagine.
“The business is set up well to accelerate our digital transformation plans and reimagine the future of TV.”
Kenrick said TVNZ generated $48.2m in cashflow from operating activities for the six months and was confident it had sufficient cash on hand to fund itself without needing to access capital from the Share Subscription facility negotiated last year.
“Based on this improved outlook, the TVNZ board has decided to repay the wage subsidy of $4.9m received in 2020. TVNZ is grateful for the assistance [at a time] of great uncertainty.”
The other major question that continues to hang over TVNZ is whether the organisation will eventually merge with RNZ.
This month, reports that RNZ staff were moving into a building currently occupied by TVNZ were met by speculation a merger might be imminent.
Kenrick advised not to read too much into this. “I’d put that down to the sales skills of the landlord rather than anything else.”
He did not, however, write off the possibility of a merger happening at some point.
“If we continue to have great content and attract scale audiences and deliver for our advertisers, that’s a good thing for us to do in our current environment, and it would also be a really good thing to contribute towards a future public media entity if that’s where we end up.”